On May 18, 2017, the United States Trade Representative (USTR) informed Congress that President Donald Trump intended to commence negotiations with Canada and Mexico with respect to the North American Free Trade Agreement (NAFTA). On May 23, the USTR issued a Federal Register notice asking for public comments and a public hearing to assist USTR as it develops its objectives and positions for the negotiations surrounding the modernization of NAFTA.
In response, the National Renderers Association (NRA) submitted comments to the notice and testified during the NAFTA hearings at the International Trade Commission in late June. Kent Swisher, vice president of NRA International Programs, testified as part of an animal products panel. Each participant was given five minutes with a 20-minute question-and-answer session that followed. The three main points in NRA’s testimony were:
1. Do no harm – keep the industry’s tariffs at zero and do not harm current trade.
2. Gain market access into Mexico for ruminant meat and bone meal (MBM).
3. Allow imports of used cooking oil (UCO) and mixed species fat from Canada into the United States.
Opening comments revolved around explaining what rendering is and the importance of the North American market. During the question-and-answer session, Swisher was asked how the rendering industry is interdependent in the North American market. He took the opportunity to expand on what rendering is and also how the industry needs to be able to move offal and finished products across borders in North America. Peter Tabor of the Pet Food Institute was asked about sanitary barriers to trade and he specifically mentioned the rendering industry’s issue with Mexico regarding the ban on exporting ruminant MBM. Tabor said the ban also hurts pet food exporters. After the hearing, a gentleman from the Canadian Embassy approached Swisher and asked about the ban on UCO and mixed species fat from Canada. Swisher explained the situation and suggested this should be an easy fix via the NAFTA negotiations if Canada pushed this issue.
The representatives of the beef industry got in a lengthy discussion over Country of Origin Labeling (COOL). The National Cattlemen’s Beef Association, Farm Bureau, and American Meat Institute are strongly against COOL being included in NAFTA negotiations while the Ranchers-Cattlemen Action Legal Fund, or R-CALF, and the US Cattlemen’s Association are in favor of COOL.
NRA submitted comments to the Federal Register notice on negotiating objectives regarding the modernization of NAFTA. Exports are vital to the American rendering industry as 16 percent of total US rendered production is exported around the world. In particular, trade in the North American market is extremely important to the US rendering industry as it has greatly benefitted from the tariff-eliminating effects of the current NAFTA. Exports of rendered products to Mexico in 1990 (pre-NAFTA) were $102 million. In 2016, exports to Mexico reached $279 million, a 179 percent increase. Over the same period, US exports of rendered products to Canada grew from $20 million to $112 million, a 460 percent increase. The rendering industry supports modernizing NAFTA to improve industry trade with Mexico and Canada.
Following are NRA’s product-specific and general comments regarding the modernization of NAFTA.
• Chapter 3: National Treatment and Market Access for Goods – Maintain all current tariff preferences on rendered products with no additional tariffs and quotas. Rendered products should continue to be exported to Mexico and Canada tariff free.
• Chapter 7: Agriculture and Sanitary and Phytosanitary Measures – Recognize and adopt the World Trade Organization (WTO) sanitary and phytosanitary (SPS) agreement, and adopt expanded WTO SPS-Plus standards, such as those that were proposed in the Trans-Pacific Partnership agreement.
• Chapter 9: Standards Related Measures – Reinforce science-based regulations to prevent non-tariff trade barriers.
US renderers seek market access for ruminant MBM to Mexico that would restore lost trade worth approximately $30-$40 million. Due to unjustified sanitary trade barriers, US renderers cannot sell ruminant MBM into Mexico even though both countries are classified as “negligible risk” by the internationally-recognized World Organization for Animal Health (OIE). OIE recommends that only “controlled” and “unknown” risk countries do not export ruminant MBM whereas negligible risk countries are not held to that same restriction. Adopting consistent standards for animal health certification following OIE standards among NAFTA countries would eliminate this trade barrier.
The United States needs access to mixed animal fat and UCO from Canada. Currently, due to archaic bovine spongiform encephalopathy regulations, the United States cannot import animal fat and UCO from Canada mixed with fats from small ruminants, such as lamb or goats. This blocks a large portion of tallow and UCO from entering the United States from Canada and lacks scientific rationale. The US rendering industry endorses the US Department of Agriculture’s proposed small ruminant rule and urges the Trump administration to finalize it. NRA strongly supports the United States gaining access to Canadian tallow and UCO.
North American trade is critical to the US rendering industry. A modernized NAFTA has the potential to further enhance and protect this trade.
August 2017 RENDER | back